Today, power is generated from a number of different sources, including renewable and non-renewable resources. Generally speaking, power output by renewable resources varies greatly depending upon weather conditions. For example, power output from solar cells is dependent upon the amount of sunlight, and power output from wind turbines is dependent upon the amount/strength of wind. Therefore, power utility entities often rely on other forms of power generators to supplement the renewable resource generators. For example, the power utility entities may utilize natural gas generators or other generators that can rapidly increase production to generate power when the power output from solar cells and/or wind turbines is insufficient to meet demand.
Moreover, power generators that utilize non-renewable resources, such as coal and/or nuclear power plants, are typically not able to adjust output rapidly in response to changes in demand (e.g., it may take a day or more to ramp up or ramp down production). Therefore, power utility entities forecast the amount of energy that will be demanded and adjust production to meet that forecast. At times when the forecast does not align with actual demand, power utility entities may be forced to take other actions. For example, when demand is greater than supply, power utility entities may utilize power generators (e.g., less efficient peaker type of generators) that can more rapidly increase production (e.g., often at a much higher cost per kWh), and when supply is greater than demand, power utility entities may decrease the cost of power to consumers (e.g., and sometimes even pay consumers) to encourage consumers to utilize more power (e.g., reducing the load on the power grid).
Thus, because electricity demands fluctuate (e.g., hourly and/or daily), it is difficult for power utility entities to match supply with demand. When supply is insufficient to meet demand, power utility entities may utilize plants that are able to ramp up production rapidly to increase supply (e.g., which are often more expensive to operate and/or are inefficient). When supply is greater than depend, power utility entities provide incentives to consumers to increase power consumption until supply is substantially aligned with demand.